A major advantage to the sales comparison approach is that it reflects the actions of which parties in the market?

The sales comparison approach is a method used in real estate appraisal that analyzes the sale prices of similar properties to establish a value for a subject property. The primary advantage of this approach is that it reflects the actual transactions and behaviors of buyers and sellers in the market.

When appraisers use this method, they look at comparable properties that have recently sold and make adjustments based on differences between those properties and the subject property. This analysis is grounded in real market activity, showcasing how much buyers are willing to pay and how much sellers are willing to accept for properties of similar characteristics. This direct reflection of market behavior helps ensure that the appraisal is aligned with current market conditions, making it a reliable basis for determining property value.

In contrast, other parties such as investors, appraisers, owners, tenants, banks, and insurers may have their interests and perspectives, but it is primarily the interaction and negotiations between buyers and sellers that drive market values. Thus, reflecting the dynamics of buyers and sellers is a foundational aspect of the sales comparison approach, providing the most relevant insight into property valuation.